Costco (NASDAQ:) has been trading in a narrow consolidation (bull pennant) since the beginning of May. This healthy action followed a 30% rally off the March 2021 lows. The Wednesday low (this week’s low) held the 50-day moving average quite nicely – putting solid footing in place. COST is far from overbought despite sitting within $10 of 2020’s all-time highs. The stock has plenty of room to run. A close above $390.00 (May/’21 highs) could spark quite a rally. On the downside, a close back below $377.00 would violate this week’s low, sending a clear warning sign of more sideways trade ahead.

Note: We are long COST in our Tactical Opportunity Portfolio.

You can read Gary S. Morrow’s original post here.

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